New York MTA: Keep Fare Hikes to 4%

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New York's Metropolitan Transportation Authority will look to keep biennial fare increases to 4%, its chairman said Wednesday.

"We'll follow the procedure we normally follow. For me to go further for the moment is inappropriate," Thomas Prendergast told reporters in midtown Manhattan after an uneventful monthly board meeting that essentially was a calm before the storm.

The MTA will schedule public hearings on the fare increases. Prendergast said Wednesday he expects to announce the schedule of hearings within the next two weeks.

The authority has factored such increases into its budget since 2009, when the state legislature required them as part of an aid package.

Prendergast spoke as the MTA, one of the largest municipal issuers with $34.4 billion of debt as of Sept. 30, is looking to fill a gap of at least $15.2 billion in its four-year, $32 billion capital program. Some capital markets observers have suggested the authority might have to raise fares further to cover any shortfall.

The Capital Program Review Board, consisting of top state officials, rejected the plan in late September. Prendergast has called the rejection letter from state transportation Secretary Joan McDonald the start of a dialogue.

"This board voted on what it required to vote on, by specific line item and category," he said.

Speaking on the two-year anniversary of Hurricane Sandy, Prendergast touted the MTA's rebuilding efforts in the aftermath of the storm. They including restoration of the A subway train across Jamaica Bay and the reopening of the Greenpoint and Montague tunnels, the latter three weeks early and under budget.

Work is continuing on the restoration of the South Ferry station in lower Manhattan and the Steinway tube, said Prendergast, and the authority is sealing off 500 points of water access in lower Manhattan.

"We have a long ways to go," said Prendergast. "Sandy is just one reason we need a fully funded capital plan."

According to Prendergast, the MTA's Metro-North Railroad has begun implementing many of the recommendations of the National Transportation Safety Board in the aftermath of five accidents from May 2013 to March 2104. They include a Dec. 1 derailment north of Spuyten Duyvil station in the Bronx that killed four people.

The NTSB has a scheduled a Nov. 19 hearing in Washington - the same day as the MTA's next regularly scheduled board meeting - to further explore findings to its latest report on Tuesday, in which it identified ineffective safety management as common to the five mishaps.

"We have responded to many of their findings," said Prendergast. The pending capital plan earmarks $365 million for agency-wide safety measures, and a further $914 million in capital funds to install so-called positive train control and communications-based train control safety measures on Metro-North and Long Island Rail Road trains.

Moody's Investors Service assigns an A2 rating to the MTA's primary credit, transportation revenue bonds. Fitch Ratings and Standard & Poor's rate them A and AA-minus, respectively.

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Transportation industry New York
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